Housing supply: news

Pensioners and working parents have been priced out of the rental market in all metropolitan areas across Australia, according to the latest Rental Affordability Index (RAI), released on 17 May 2017. Rental affordability dropped over the last quarter in all metropolitan areas, except Perth.

“The latest Rental Affordability Index is a wake up call - without swift coordinated action to tackle housing affordability, Australia will become a divided country, with pensioners, working parents and other low income groups locked out of living in metropolitan areas,” said Andrew Cairns, CEO Community Sector Banking.

“The RAI shows that working families – not just low income households – are now being priced out of Australia’s metropolitan rental markets. Housing for pensioner groups is also in a particularly critical situation, given their additional needs and service-dependence,” said Ellen Witte, Partner at SGS Economics and Planning.

“This index reminds us how much work governments, the community and private sectors have to do. While the budget introduced some welcome measures house price inflation is locking people out of ownership and putting much greater pressure on rental markets which remain unaffordable and displaces low income households into the margins,” said Adrian Pisarski, Executive Officer of National Shelter.

National Shelter, Community Sector Banking and SGS Economics and Planning have released the Rental Affordability Index (RAI) on a biannual basis since 2015 as an indicator of rental affordability relative to household incomes. This release highlights the situation for low income groups, including aged pensioners and part-time working parents.

In a report released on 1 March 2013, the National Housing Supply Council has highlighted the impact of the shortage of low-cost housing on the more vulnerable in our population: households that are dependent on government incomes, households living at the lower end of the private rental market, and would-be homepurchasers with low and insecure incomes. The council stated:

A sustained shortfall in housing production relative to population growth (the main component of additional underlying demand) ‘trickles down’ through the distribution of income and wealth. It affects most the people who lose in the competition for available properties. These people may end up renting when they expected to become home owners, not forming a separate household because they cannot find anywhere suitable to live, needing government subsidies to obtain housing, pushing others — or being pushed — out of the private rental market and into social housing, living in unsuitable housing or overcrowded conditions, or becoming literally homeless. If the level of underproduction is substantial, it affects progressively more people who are relatively affluent. If underproduction varies across cities or States, then more ‘footloose’ economic activity, jobs and people will move from areas of deficit to areas where housing and workforce opportunities are in better supply. (page 127)